Google’s decision to open-source its recently acquired VP8 video codec is also having major effects on the web media market.

Google announced today at Google I/O that it will be combining VP8 with the Ogg audio codec to form WebM. WebM will be supported by a number of entities including Firefox and Opera. Hardware vendors supporting WebM include graphics chip maker Nvidia and CPU maker AMD.

Google also announced that it will be converting 720p and 1080p video uploaded to YouTube after May 19 to WebM format as part of its continuing HTML5 experiment.

In other news, Adobe will be releasing a Flash update pack to support VP8 within Flash.

Longer term, any decision by YouTube to change its preferred video codec option will obviously impact devices such as the iPhone and the newly released iPad, both of which support H.264 and not VP8. This is seen as one of the major advantages to H.264 – it already has wide hardware support in devices from the iPhone through to free-to-air television broadcasting.

Microsoft and Apple are yet to make any official statement about WebM.

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